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With the dawn of a new year comes the opportunity to sit down for a few minutes and reflect on the successes and challenges you encountered in your business during 2015. Pat yourself on the back for that new product line that has worked out so well; bask in the glow of a sales campaign that exceeded your expectations. At the same time, bite the bullet and analyze where you may have fallen short as a freelancer. Acknowledging and understanding your mistakes can help you to prevent repeating them in the future. Here are three of the top errors that many freelancers commit.

1. Failing to Report Income to the IRS

Did you know that Uncle Sam views freelancers as small business owners and expects them to act as such? This means estimating and submitting your taxes quarterly, not yearly as you may do with your personal returns. This can be a challenge if your income is sporadic, but failing to make this a priority can cause the IRS to put a red flag next to your name and potentially target you for an audit. You don’t want that, do you?

2. Failing to Obtain Health Insurance

Especially if you are young and healthy, you might fall into the trap of avoiding the purchase of health insurance. When money is tight and you are scrambling to keep your head above water, protecting yourself against medical costs that may never happen could seem frivolous. However, the reality is that accidents and illnesses happen to everyone. When they do, the bills can mount with awe-inspiring speed. What’s more, the government will penalize you $695 or 2.5 percent of your income, whichever is higher, when they learn that you have lapsed on this responsibility. If you didn’t already know it, medical bills are the number one reason for business bankruptcy in the United States. Don’t set yourself up for a big and costly fall.

3. Having No Insurance, Insufficient insurance, or the Wrong Kind

Admit it: You have probably questioned the necessity of sending your hard-earned money to an insurance company to protect you against something that may well never happen. However, just as is the case with health coverage, you simply cannot afford to make compromises in this area. Furthermore, you may believe that you already have enough coverage in your standard homeowners or vehicle insurance to keep you protected in your freelance business. Unfortunately, that is not usually the case.

Typically, the best small business insurance consists of additional umbrella coverage that will protect you against personal liability. If just one customer or delivery worker were to slip and fall on your driveway or in your office space, you could be looking at a six-figure lawsuit and mind-bending legal expenses, both of which would be handled by the right type of insurance. Finally, it is in your best interest to also purchase short- and long-term disability coverage for yourself and any employees you may have. It may well be the only financial safety net you have in the event of accident or illness.

At this time of analyzing the past and formulating resolutions for the future, you are in a terrific position to make this year the best one ever for your business. Take a few steps now, and you can markedly reduce or totally avoid some nasty surprises down the line. With some forethought and a reasonable financial outlay, you can keep Uncle Sam happy, protect yourself from unforeseen health costs and ensure that you have the best small business insurance that will offer you protection if the worst should happen.

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